Turning R&D into a profit center

Jeff Greason of XCOR Aerospace gave an overview of his company’s work at Space Access this morning. He noted that the company actually turned a profit last year, with revenues of approximately $3.8 million; the profit was an artifact of the timing of the contracts it was working on, and he said he doesn’t anticipate being profitable again this year, although revenues should be similar to 2006. Because XCOR doesn’t have an independently wealthy founder or patron, “we have to flip burgers for a living”: doing developmental work for a number of government and commercial customers. XCOR selects that work based on the problems XCOR is facing for its own projects, thus in effect getting a customer to pay for XCOR’s R&D. “We have turned R&D from a cost center to a profit center,” he said.

XCOR is working on three engine projects: a 50-lbf engine for RCS applications, a 1,500-lbf engine for the Rocket Racing League (RRL), and a 7,500-lbf engine with ATK for NASA. The efforts are all going well, and Greason said that the RRL engine work, which had been going slowly at the request of the customer, is now ready to go back into high gear. XCOR is also still developing its own suborbital vehicle design, although Greason gave few specific details about the project, and no development schedule or funding information (although he did say later that have not finished raising all the money they need for the effort, but are close.) He did say that XCOR will, in the future, offer more details about its long-term roadmap, in much the same way Masten Space Systems does. “Suborbital is not the last step on our road.”